Atlas Furniture Company manufactures designer home furniture. Atlas uses a standard cost system. The direct labor, direct materials, and factory overhead standards for an unfinished dining room table are as follows:Direct labor:standard rate$28.00 per hr. standard time per unit5.0 hrs.Direct materials (oak):standard price$12.00 per bd. ft. standard quantity18 bd. ft.Variable factory overhead:standard rate$2.00 per direct labor hr.Fixed factory overhead:standard rate$3.80 per direct labor hr.a. Determine the standard cost per dining room table.$fill in the blank 1 per tableb. A standard cost system provides Atlas Furniture Company's management a cost control tool using the principle of . Using this principle, cost deviations from standards can be investigated and corrected.

Lets understand the basics.Standard cost calculated in order to compare it with actual results. It…

Answered: Atlas Furniture Company manufactures…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter23: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 2E: Atlas Furniture Company manufactures designer home furniture. Atlas uses a standard cost system. The...

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Atlas Furniture Company manufactures designer home furniture. Atlas uses a standard cost system. The direct labor, direct materials, and factory overhead standards for an unfinished dining room table are as follows:

Direct labor:	standard rate	$28.00 per hr.
	standard time per unit	5.0 hrs.
Direct materials (oak):	standard price	$12.00 per bd. ft.
	standard quantity	18 bd. ft.
Variable factory overhead:	standard rate	$2.00 per direct labor hr.
Fixed factory overhead:	standard rate	$3.80 per direct labor hr.

a. Determine the standard cost per dining room table.
$fill in the blank 1 per table

b. A standard cost system provides Atlas Furniture Company's management a cost control tool using the principle of

. Using this principle,

cost deviations from standards can be investigated and corrected.

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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